Advanced Energy Security Measurement and Monitoring

The single, or dash-board, indicators of energy security are useful in offering preliminary assessment of the state of energy security, and in signaling trends based on available data and in offering broadly understandable and easy-to-measure metrics. The energy system, however, is more complex, and understanding energy security of a complex system may require designing and implementing indicators that offer a comprehensive assessment to decision-makers who can benefit from concrete assessment and indicators that inform on the vulnerability and impact of the whole energy system, beyond fuel-based assessment. Scheepers, et al (2007) offer two comprehensive energy security assessment indicators geared towards short-term disruption risks in the energy system, and energy

16 The transportation sector is widely viewed as inelastic to oil price changes; therefore, if the share of oil consumption in the transportation sector is large, the impact of oil disruption is amplified as

flexibility is reduced due to the nature of the sector and the structural necessity of oil in its functioning.

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security risks in the long-run, with the energy system as a central consideration. These indicators are the Crisis Capability Index (to assess short-term energy security risks) and the Supply-Demand Index (to assess long-term energy security risks), finding application in energy security assessment of countries, such as Ireland and more recently the IEA Clean Coal Center long-term coal security assessment (see Loschel, et al., 2010).

The Crisis Capability Index: the crisis capability index (CCI) is a comprehensive assessment of short-term energy security risks based on two category of information: Risk Assessment (RA) and Mitigation Assessment (MA).

Risk factors indicate on the sources of vulnerability in a country’s energy system. As shown in Table 11, risk assessment is evaluated across four areas of the energy system:

primary production risks; energy conversion risks; energy import risks and domestic and import transportation routes. In domestic production of oil, gas, coal and renewable energy, the challenge can emerge from the location of production, the degree to which applied technology is obsolete and management and operational efficiency. Places that are hard to access domestically, employing outdated or less reliable technology and that are mismanaged increase the risk of domestic supply disruption.

Table 11: Risk assessment (RA) of sudden supply interruptions.

Category Energy System Element Risk Factors

Domestic Primary Energy Production

Domestic oil production Technical and organizational (a), human (b), political (c) and natural (d) factors

Domestic natural gas production (a), (b), (c), (d) Domestic coal production (a), (b), (c), (d) Domestic renewable energy

production

(a), (b), (c), (d)

Domestic biomass production (a), (b), (c), (d)

Energy Conversion

Power plants (a), (b), (c), (d)

Refineries (a), (b), (c), (d)

Improved and modern cookstoves (a), (b), (c), (d)

Inland energy transport

Gas pipelines (a), (b), (c), (d)

Electricity lines (a), (b), (c), (d)

Biomass distribution system (a), (b), (c), (d)

Energy import

Oil import (a), (b), (c), (d)

Natural gas import (a), (b), (c), (d)

Electricity import (a), (b), (c), (d)

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Biomass import (a), (b), (c), (d)

Energy import transport

Sea transport routes - gas (a), (b), (c), (d) Land transport routes - gas (a), (b), (c), (d)

Gas pipelines (a), (b), (c), (d)

Sea transport routes - oil (a), (b), (c), (d) Land transport routes - oil (a), (b), (c), (d)

Oil pipelines (a), (b), (c), (d)

Land transport – biomass (a), (b), (c), (d) Source: Adapted from Scheepers, et al. (2007). Indicators for biomass, relevant in the Eastern Africa sub-region,

are added by authors.

In the case of domestic biomass production, which accounts a large share of primary energy source in the Eastern Africa sub-region, the sustainability of harvest, forest management practices, the technology employed in forest harvest and the location of the bulk of biomass resources have a bearing on the security of biomass supply. Domestic production can also be disrupted by political instability and natural disasters.

Risk assessment, beyond domestic production source and challenges, should look at energy conversion. With stable and secure primary energy supply, energy security is also determined by the effectiveness of the energy conversion system, including power plants and refineries. Power plants can be riddled with obsolete technology, lack of proper maintenance, poor management and generation below capacity. The degree to which these factors limit the efficiency of converting primary energy source into electricity can lead to electricity shortages, outages or out-right blackouts, severely constraining energy security. The recent blackout in India putting millions of consumers and producers out of service, largely due to power-taking beyond regional allocated quota is one such example. In the Eastern Africa sub-region, policy, operation, technological and investment and upgrade challenges to many of the power stations have long been a source of energy insecurity.

Another risk factor is the domestic and sea/land import routes security. Sea transportation of energy sources has to deal with the risk of piracy and sea transportation accidents. Import inland routes also pose challenges of infrastructure capacity, maintenance, safety and affordability, particularly to land-locked countries. The quality of domestic energy infrastructure, including road and pipelines, can also determine the nature of transportation-related energy security risks. Finally, risk assessment also considers energy import challenges, including exposure to international market price shocks, supply disruption risks emanating from political instability in exporting countries, geopolitical challenges, and other factors that impact the global flow of energy resources and their prices. The greater the import dependence, particularly from vulnerable countries, the greater is the energy security risk.

With regard to mitigation assessment (MA), as shown in Table 12, five factors are often considered: the existence of emergency, or strategic, reserves/stocks; existence of

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demand management schemes; technological flexibility with fuel switching capacity in electricity generation; and reserve and locked-in capacities.

Emergency stocks offer a short-term mitigation capacity if any of the risk factors materialize. Strategic reserves set-up, its draw-down and injection to markets are governed by response mechanisms governed by the energy policy or energy security management procedures. Effective strategic reserve policies and procedures, sound reserve management and coordinated release mechanisms help markets stabilize while short-term disruptions are dealt with by decision-makers. Lack of strategic reserves exposes countries to the full impact of energy disruptions. In the case of biomass, since its wood and charcoal production are predominantly artisanal, and often lack coordinated production and distribution management at large-scale, strategic reserve options are quite limited.

Strategic reserves are complemented by demand restraint measures in times of disruptions. Demand restraint could be rationing remaining supplies equitably while markets stabilize and natural reply on prices as the distributive mechanism, or it could be allocation to prioritized sectors of the economy, such as public service providers, strategic industries and public safety and security institutions. Particularly for electricity, the technological capacity of power plants to switch to alternative power generation source is a factor in mitigation strategy. Excessive reliance in one source, such as hydro, which can be exposed to severe draught and water shortage, can drastically impact power output in the face of no fuel switching option. Demand restraint options for biomass (wood and charcoal) are also limited due to the highly decentralized and artisanal nature of the industry that offers limited regulatory oversight and control.

Table 12: Mitigation assessment (MA) of sudden supply interruptions.

Category Energy System Element

Emergency Stocks

Oil Oil stocks

Coal Coal (peat) stocks

Gas Gas stocks (e.g. LNG)

Biomass Wood and charcoal stock

Demand restraint and rationing

Electricity Rationing

Gas Rationing

Transport fuels Primary users, rationing

Biomass Rationing

Fuel switching capability Electricity Multi fuel power plants

Reserve capacity

Electricity Import capacity, generation reserves Gas Reserve capacity, pipeline capacity Refineries Spare capacity

66 Locked-in production

Oil Domestic oil production

Coal Domestic coal production

Gas Domestic gas production

Biomass Domestic biomass production

Source: Adapted from Scheepers, et al. (2007). Indicators for biomass, relevant in the Eastern Africa sub-region, are added by authors.

Domestic reserves and locked-in capacities are additional mitigation strategies in times of energy shortages. Reserve capacity in electricity supply can come from imports, if the national grid is connected to neighboring and regional power sources, or it can come from reserve generation capacity locally. This is the case for refineries as well. For gas production, additional production capacity and distribution pipeline remaining capacity are part of the domestic reserve capacity. Locked-in production offers added flexibility in utilizing more of domestic energy resources. Again, the decentralized and artisanal nature of the wood and charcoal supply chain limits possibilities of utilizing domestic reserves (partly biological) and locked-in capacities to manage disruptions.

The Supply-Demand Index: the crisis capabilities index focuses on the sources of short-term energy insecurity and their mitigation management. Energy security, however, has long-term trends, where the entire energy system can shift to more insecure or secure path based on choices taken and external factors a country is exposed to overtime. The supply-demand index is designed to measure long-term energy security based on information on the demand and supply sides of the energy market. It is based on both quantitative and qualitative assessment of energy systems. Long-term energy security had often been assessed from primarily the supply side (Jansen, et al., 2004; Blyth and Lefévre, 2004). Scheepers, et al (2007) include demand side assessments in the supply-demand index.

The demand for energy is generated in the industrial residential, services and transport sectors. The rate of growth of demand in these sectors and the ability of the supply side to match demand determines long-term energy security. Energy efficiency industry, efficient household appliances, fuel standards in the transportation sector and other demand containment schemes help manage the rate of demand expansion without severely constraining socioeconomic activities.

On the supply side, as shown in Fig. 45, the adequacy and stable supply of primary energy sources (PES) such as oil, gas, coal, biomass and others are part of the energy security supply side challenges. On conversation and transportation aspects, the efficiency, adequacy and reliability of electricity, gas and transportation fuels will drive the state of supply side energy security challenges. Determining the long-term energy security of a country through the supply-demand framework requires extensive data, consultation with stakeholders and identification of security challenges across time in the entire energy system.

Figure 45: Framework for supply-demand energy security assessment.

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Source: Scheepers, et al. (2007).

68 electricity and biomass systems. Applying the measurements and indicators in section 3.2, an overview of the energy security condition and challenges in the sub-region is provided below, based on single indicators and series of indicators informing on the short- and long-term energy security status and challenges.

3.3.1 Petroleum Import Dependence and Energy Security in Eastern Africa sub-Region